What to do if you want to work past retirement age

The days of everyone giving up work on a set retirement date is over. Today, retirees are making their life after the traditional pension age suit them. For some, that means continuing to work in some form. If you’re approaching retirement and giving up work completely isn’t appealing, you’re not alone.

There are many reasons why you may be thinking about working beyond retirement, from boosting your disposable income to enjoying your career. Throughout our lives, work becomes an important part of our identity and giving it up can be challenging. Luckily, there are many possibilities open to modern retirees, ranging from staying in your current role full-time to launching your own business.

If a phased approach to retirement is appealing to you, there are some questions to think about first.

What do you want out of your ‘retirement’?

The first area to think about is what your aspirations are. Even if you still want to continue working in some form, it’s an opportunity to assess your current work-life balance. Once you reach traditional retirement age you probably have a lot more flexibility than you previously did, allowing you to carve a path that suits you.

Travel often features highly in the list of retirement aspirations, as does spending time on hobbies and with grandchildren. Assessing what your priorities are as you start the next chapter means you can make work fit around your life goals.

Will you continue in your current role?

If you still enjoy your career and there are more achievements you want to tick off, you may decide to stay in your current role. For others, trying something completely different can lead to greater satisfaction.

If you decide to stay with your current employer, you should also spend some time thinking about if you’d like your role to change. For example, would you prefer to work fewer hours or have the option to work from home? Employers are increasingly taking a flexible approach to their workforce. Not all will be able to or willing to accommodate requests but knowing what you want before you ask is a good place to start.

What other employment options are there?

Since you joined the workforce, the world of work has likely changed immensely. If staying in your current role doesn’t align with your retirement aspirations, it’s worth looking at other options outside of traditional employment.

Depending on your career path, you could find your skills are in high demand in a freelance or consulting capacity. Providing you with greater flexibility, it could be a way for you to balance retirement goals with your desire to continue working.

Research from Aviva suggests that one in ten retirees hope to launch their own business too. Thanks to digital technology, it’s never been easier to set up a business and reach your target audience. If you’re approaching retirement age and have always wanted to test your entrepreneurial skills, now may be the time to do so.

What are your income needs?

Hopefully, it’s not just income needs that are influencing your decision to continue working. However, your finances are an important part of creating a retirement that’s right for you.

If you continue to work, how will your income change? Will your income needs also change? It’s common for essential expenditure to fall when you retire. You may no longer be using your car as much now you’re not commuting, for example, and have paid off your mortgage. But you may want access to a greater level of disposable income to indulge hobbies, travel more or support your family.

Understanding what your income needs are likely to be, linking back to your aspirations, can help create a plan that’s tailored to you.

What retirement provisions do you already have?

There are a few reasons you should look at what retirement provisions you have already saved, even if you’re not ready to leave the world of work behind you.

Firstly, you may decide to access some of your retirement savings to supplement your income. If you do this, you need to ensure the level you withdraw from your retirement provision is sustainable. There are multiple options for withdrawing money from a pension, so working out which is the most efficient for you is important.

Alternatively, you may decide to continue contributing to a pension while you work. If you could face a shortfall in later years, this could be the ideal way to increase your projected income. However, if you’ve consistently contributed to a pension, you should be mindful of the Lifetime Allowance, which is currently set at £1.03 million.

Should you defer claiming your State Pension?

The State Pension will form the foundation of most people’s income in retirement. But if you don’t yet need the income it will provide, you can choose to defer it.

For every nine weeks you defer, your State Pension will increase by 1%. Assuming you qualify for the full State Pension of £164.35 a week, you’d receive an extra £493 annually by deferring for a year. In some cases, your spouse or civil partner can inherit your extra State Pension should you die before them too.

Whether delaying taking your State Pension is the right decision will depend on a range of factors, including your other income, retirement objectives, and health.

When do you want to stop working?

While you may not want to give up working immediately, it’s a good idea to consider the long term. Thinking about when it’s likely you would like to stop working can help create a plan that matches how your priorities are likely to change throughout the years.

If you’re approaching retirement but don’t want to give up work, we can help. We’ll help you align your retirement goals with your finances, ensuring you get the most out of your future and pension.

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